Encanto Potash Corp. has signed an agreement with Muskowekwan First Nation and the provincial and federal governments that it says will pave the way for construction of its proposed potash mine on the reserve northeast of Regina.

The agreement is expected to lead to the first First Nations Commercial and Industrial Development Act (FNCIDA), legislation that applies existing provincial rules to large-scale projects on First Nations land, the Toronto-based company said in a news release.

“By achieving this milestone, the first ever for such a planned large scale operation in Canada, we have been breaking entirely new ground,” Muskowekwan Chief Reginald Bellerose said in a statement.

“(We are not only ensuring) that we ourselves are a significant resource player in Canada for generations to come, but paving the way for other First Nations to achieve self-source revenues and a self-dictated future full of promise.”

Gary Deathe, Encanto’s director of corporate development, said in an email that the FNCIDA agreement is a “long awaited and important step” toward establishing the mine.

Encanto still needs to raise around $3 billion to cover its capital costs.

Because projects regulated under FNCIDA apply existing provincial regulations to First Nations land, “it gives investors and developers certainty by ensuring that they are dealing (with) … well known and understood (rules),” Encanto said in the news release.

“This represents another critical piece being in place to allow for the eventual development of the first potash mine on First Nation land in Canada and the first … to complete the FNCIDA,” Encanto president and CEO Stavros Daskos said in a statement.